This quiz works best with JavaScript enabled. Home > Finance > Accounting > Auditing > Auditing – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Auditing Quiz 14 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The files obtained by the Third Party are a confirmation response from..... A) Customers (about receivables). B) Analysis of whether or not the Allowance for Bad Debts is sufficient. C) Trial balance. D) Income statement. Show Answer Correct Answer: A) Customers (about receivables). 2. The principles of the auditor's code of ethics are: A) Responsibility, Public interest, Integrity, Objectivity, Accuracy or thoroughness, Scope and nature of services. B) Responsibility, Public interest, Integrity, Objectivity and independence, Accuracy or thoroughness, Scope and nature of services. C) Responsibility, Public interest, Integrity, Independence, Accuracy or thoroughness, Scope and nature of services. D) Responsibility, Public interest, Integrity, Objectivity and independence, Accuracy or thoroughness, Nature of services. Show Answer Correct Answer: B) Responsibility, Public interest, Integrity, Objectivity and independence, Accuracy or thoroughness, Scope and nature of services. 3. Process of checking the evidence of the entries is called ..... A) Verification. B) Observation. C) Vouching. D) None of above. Show Answer Correct Answer: C) Vouching. 4. Vouchers are evidence of a transaction A) True. B) False. Show Answer Correct Answer: A) True. 5. What inventory method does PT Sugus use? A) FIFO. B) Weighted Average. C) FILO. D) LIFO. Show Answer Correct Answer: A) FIFO. 6. To determine whether the internal control described in the accounting system flow chart and answers to the internal control questionnaire actually exists and is implemented, the auditor takes two methods, namely..... A) Perform tests of controls and substantive tests. B) Carry out transaction testing by following the implementation of certain transactions and testing certain transactions that have occurred and which have been recorded. C) Conducting tests of certain transactions that have occurred and that have been recorded and substantive tests. D) Carry out transaction testing by following the implementation of certain transactions and testing controls. Show Answer Correct Answer: B) Carry out transaction testing by following the implementation of certain transactions and testing certain transactions that have occurred and which have been recorded. 7. What is the meaning of IT Auditing? A) It is the examination and evaluation of an organization's information technology infrastructure, policies and operations. B) It is the examination and evaluation of an organization's information technology infrastructure. C) To check financial records. D) To validate Computer hardware only. Show Answer Correct Answer: A) It is the examination and evaluation of an organization's information technology infrastructure, policies and operations. 8. In India, balance sheet audit is synonymous to A) Continuous audit. B) Annual audit. C) Statutory audit. D) Detailed audit. Show Answer Correct Answer: B) Annual audit. 9. Which of the following is known as a compensating control, for the absence of segregation controls. A) Supervision. B) Independent verification. C) Access control. D) Authorisation. Show Answer Correct Answer: A) Supervision. 10. Statement I Fixed assets have different characteristics from current assets. This difference has an impact on the substantive tests of the two classes of assets. Statement II Fixed asset accounts have large balances in the balance sheet; Transactions related to fixed assets tend to occur more frequently, resulting in large balances A) Statement I is True Statement II is False. B) True Statement THIS Statement is True. C) Statement I is False Statement II is True. D) Statement I is False. Statement II is False. Show Answer Correct Answer: A) Statement I is True Statement II is False. 11. Auditing standards are details of the Statement of Auditing Standards consisting of..... A) 11 standard. B) 10 standards. C) 9 standards. D) 8 standards. Show Answer Correct Answer: B) 10 standards. 12. Who is the highest position in the audit firm? A) Audit manager. B) Audit director. C) Audit partner. D) Audit senior manager. Show Answer Correct Answer: C) Audit partner. 13. HEAL-ME has specific conduct for ALL engagements, but GAAS has specific conduct for how many engagements? A) Half of them. B) Individual. C) All. D) None. E) This question doesn't make any sense. Show Answer Correct Answer: B) Individual. 14. The following are the objectives of internal control, except..... A) Reliability of financial reporting. B) Compliance with applicable laws and regulations. C) Effectiveness and efficiency of operations. D) Risk assessment. Show Answer Correct Answer: D) Risk assessment. 15. The party who receives the report from internal audit is A) Third parties (investors and creditors). B) Management of the entity concerned. C) Government. D) Management of corporate entities. Show Answer Correct Answer: B) Management of the entity concerned. 16. ....section of Companies Act deals with share Capital A) 59. B) 69. C) 60. D) 50. Show Answer Correct Answer: B) 69. 17. The following are the basic principles that an auditor must have, unless appropriate A) CORRECT. B) SALAH. Show Answer Correct Answer: A) CORRECT. 18. Regarding auditor's duty of confidentiality, auditors must never, under any circumstances, disclosures any matters of which they become aware during the course of the audit to third parties, without the permission of the client. A) True. B) False. Show Answer Correct Answer: B) False. 19. The auditor identifying why the client wants or needs an audit is an internal matter A) Audit level. B) Audit plan. C) Initial stage of the audit. D) Audit risk. Show Answer Correct Answer: C) Initial stage of the audit. 20. Internal audit is a device for checking the work, where as internal check is a device for doing the work A) True. B) False. C) Not sure. D) Partially right and partially wrong. Show Answer Correct Answer: A) True. 21. Which of the following describe the true relationship between auditor, client and external users? A) Management provides capital to external users and auditor is hired to provide report relied upon by users for assurance. B) External users rely on auditor's report assurance to reduce information risk provided by management. C) Auditor ensure report are based on management decision on the economic event to be presented to external users. D) Management and auditor provide financial statement to external users. Show Answer Correct Answer: A) Management provides capital to external users and auditor is hired to provide report relied upon by users for assurance. 22. ..... systematic record of books and records of a business A) Checking. B) Auditing. C) Vouching. D) Verification. Show Answer Correct Answer: B) Auditing. 23. Which of the following activities would most likely be performed by EDP department? A) Distributing output. B) Parity checks. C) Authorising transactions. D) Correction of transactional errors. Show Answer Correct Answer: C) Authorising transactions. 24. Internal and external auditor performed a different methodology in their audits. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 25. The art of recording the transactions in the books of original entry means A) Accounting. B) Auditing. C) Book-keeping. D) None of the above. Show Answer Correct Answer: C) Book-keeping. 26. Auditors produce ....., stating that the financial statements do not give an entirely true and fair view and there are some problems. A) A qualified report. B) An unqualified report. Show Answer Correct Answer: A) A qualified report. 27. Which of the statements below is true regarding management letters? A) Management letters are prepared to communicate less significant internal control problems. B) Management letters are prepared by management together with auditors to fulfill good governance provisions stipulated by statutory regulations. C) Management letters are required by auditing standards to be prepared before an audit is carried out. D) Management letters are prepared by management in the context of stating assertions about the company's financial reports. Show Answer Correct Answer: A) Management letters are prepared to communicate less significant internal control problems. 28. Which is correct about state audit? A) State Audit organization plays a role as a management tool of the State, especially in the expenditure State budget. B) It helps to improve and strengthen the management of State agencies, or organizations in compliance with law and other regulations such as the business law, the added value tax law, the environment protect law, and accounting law . C) Audit State organizations can perform many kinds of audits such as financial statement audit, performance audit and compliance audit. D) All of above answers. Show Answer Correct Answer: D) All of above answers. 29. If a casual vacancy in the office of auditor arises by his resignation it should only be filled by the company in a A) Extraordinary general meeting. B) Annual general meeting. C) Board meeting. D) General meeting. Show Answer Correct Answer: C) Board meeting. 30. The following are the criteria used by Public Accountants in conducting Accounting Audits: A) The regulations set by the Government. B) Public Accountant Professional Standards. C) Financial Accounting Standards. D) Budget or achievement measure set by the company. Show Answer Correct Answer: C) Financial Accounting Standards. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesAuditing Quiz 1Auditing Quiz 2Auditing Quiz 3Auditing Quiz 4Auditing Quiz 5Auditing Quiz 6Auditing Quiz 7Auditing Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books